Wednesday, 2 October 2019

"This week marks the 138th birthday of Ludwig von Mises, the greatest defender of capitalism in the history of economic thought. No one is truly educated who has not read and studied his works. " #QotD



"[This week marks] the 138th birthday of Ludwig von Mises, the greatest defender of capitalism in the history of economic thought. No one is truly educated who has not read and studied his works.
His ideas deserve and have the ability to replace Marxism in people’s minds. They need to be read, studied, and spread further, to and by professors and teachers at all levels, to and by journalists, government officials, businessmen, and intelligent laymen in all walks of life.
    "Von Mises is important because his teachings are necessary to the preservation of material civilisation. As he showed, the base of material civilization is the division of labour. Without the higher productivity of labour made possible by the division of labour, the great majority of mankind would simply die of starvation. The existence and successful functioning of the division of labour, however, vitally depends on the institutions of a capitalist society—that is, on limited government and economic freedom, private ownership of land and all other property, exchange and money, saving and investment, economic inequality and economic competition, and the profit motive—institutions everywhere under attack for several generations...
    "Socialism, von Mises showed, in his greatest original contribution to economic thought, not only abolishes the incentive of profit and loss and the freedom of competition along with private ownership of the means of production, but makes economic calculation, economic coordination, and economic planning impossible, and therefore results in chaos. For socialism means the abolition of the price system and of the intellectual division of labour...
    "Von Mises's contributions to the debate between capitalism and socialism—the leading issue of modern times—are overwhelming... Von Mises demonstrated that capitalism is an economic system rationally planned by the combined, self-interested efforts of all who participate in it. The failure of socialism, he showed, results from the fact that it represents not economic planning, but the destruction of economic planning, which exists only under capitalism and the price system.
    "Von Mises was not primarily anti-socialist. He was  pro-capitalist...
    "Von Mises showed that all of the accusations made against capitalism were either altogether unfounded or should be directed against government intervention, which destroys the workings of capitalism. He was among the first to point out that the poverty of the early years of the Industrial Revolution was the heritage of all previous history—that it existed because the productivity of labor was still pitifully low; because scientists, inventors, businessmen, savers and investors could only step by step create the advances and accumulate the capital necessary to raise it. He showed that all the policies of so-called labor and social legislation were actually contrary to the interests of the masses of workers they were designed to help—that their effect was to cause unemployment, retard capital accumulation, and thus hold down the productivity of labor and the standard of living of all. In a major original contribution to economic thought, he showed that depressions were the result of government-sponsored policies of credit expansion designed to lower the market rate of interest. Such policies, he showed, created large-scale malinvestments, which deprived the economic system of liquid capital and brought on credit contractions and thus depressions...
    "Von Mises's books deserve to be required reading in every college and university curriculum—not just in departments of economics, but also in departments of philosophy, history, government, sociology, law, business, journalism, education, and the humanities. He himself should be awarded an immediate posthumous Nobel Prize—indeed, more than one. He deserves to receive every token of recognition and memorial that our society can bestow. For as much as anyone in history, he laboured to preserve it. If he is widely enough read, his labours may actually succeed in helping to save it.
~ George Reisman, a student of Ludwig Von Mises, from his Tweet tribute, and his 1981 article 'Ludwig von Mises: Defender of Capitalism'
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